Coming To Your Door: USTR Trade Barriers Report Lists Concerns To Raise With Trading Partners

The newly released United States government annual report on trade barriers for US exports provides a laundry list of issues it views as inhibiting US products and services from being treated fairly or sufficiently protected in its key trading partners. Among the many issues are many concerns about intellectual property rights, digital trade, broadcasting, pharmaceuticals and more.

The 2018 US National Trade Estimates report on foreign trade barriers is available here [pdf]. It was published on 30 March by the Office of the US Trade Representative (USTR).

The report covers “the largest export markets” for the United States, including 60 countries, the European Union, Taiwan, Hong Kong, and one regional body (the 22-member Arab League).

It looks at a wide range of categories, such as sanitary/phytosanitary measures, government procurement, export subsidies, digital trade barriers, and lack of intellectual property protection, for example, “inadequate patent, copyright, and trademark regimes and enforcement of intellectual property rights.” The list comes from US government agencies, a public comment process, and US industry advisors.

In a nod to growing trade by electronic networks, country chapters include a dedicated section on barriers to digital trade, it said. The report also highlights barriers to US telecommunications services and goods exports as called for in the annual review under Section 1377 of the Omnibus Trade and Competitiveness Act of 1988. Chapters also discuss the markets for broadcasting.

On intellectual property, the report said a trend is occurring of trading partners impose barriers that favour their domestic industries.

“The United States has observed a growing trend among trading partners to impose localization barriers to trade – measures designed to protect, favor, or stimulate domestic industries, service providers, or intellectual property at the expense of imported goods, services or foreign – owned or developed intellectual property,” it states in the foreword.

“These measures may operate as disguised barriers to trade and unreasonably differentiate between domestic and foreign products, services, intellectual property, or suppliers,” it said. “They can distort trade, discourage foreign direct investment and lead other trading partners to impose similarly detrimental measures. For these reasons, it has been longstanding U.S. trade policy to advocate strongly against localization barriers and encourage trading partners to pursue policy approaches that help their economic growth and competitiveness without discriminating against imported goods and services.”

The report acknowledges that it is hard to be certain about the size of the problem related to IP rights, among other categories.

“[W]ithout detailed information on price differences between countries and on relevant supply and demand conditions, it is difficult to derive the estimated effects of these measures on U.S. exports,” it said. “Similarly, it is difficult to quantify the impact on U.S. exports (or commerce) of other foreign practices, such as government procurement policies, nontransparent standards, or inadequate intellectual property rights protection.”

The country-by-country sections seem to particularly emphasise counterfeiting and restrictions on patents and pharmaceutical test data, issues it links to harm to innovators.

In general, the intellectual property chapters echo concerns that have been made before, some for many years, and could be read as an agenda for negotiations and bilateral trade relations. But with the Trump administration taking opportunities to renegotiate more favorable bilateral agreements with countries, it might give some clues as to what they would emphasise.

For instance, in the case of Australia, USTR offers praise for its enforcement and protection of IP, but then raises concerns on behalf of the US – and Australian – pharmaceutical industry about a provision in their bilateral free trade agreement that they say causes delays in notifications for marketing approval. And it uses fairly strong accusatory language (especially for a strong trading partner), yet leaves out the specifics:

“The U.S. Government also has raised concerns about provisions in Australian law that impose a potential significant, unjustifiable, and discriminatory burden on the enjoyment of patent rights, specifically on the owners of pharmaceutical patents.”

The IP sections also mention when a country has implemented a Patent Prosecution Highway program, allowing more sharing of patent filings among countries.

It is notable that the chapter on China takes up nearly 30 pages of the 500-page report (pp. 90-110). Reading the chapter, it seems China is doing an enormous number of things to impede US exports. The section on intellectual property rights is some three full pages alone, detailing complaints about trade secrets, bad faith trademark registration, pharmaceuticals, online infringement, and counterfeit goods.

 

Image Credits: USTR